The Strategic use of Human Resources

This is an excerpt of a paper I wrote while working on my MBA. To read the entire article, download the PDFThe Strategic use of Human Resources.”

One concept that emerged in the late twentieth century that calls for a strategic partnership with HR is the concept called Strategic Human Resource Management (SHRM). SHRM has been defined as “the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility” (Truss & Gratton, 1994). In the SHRM view, the functional and operational aspects of an organization’s HR group are still important and necessary, but the HR group is also considered to be a partner within the organization and is involved in developing strategy. The strategy developed from this partnership provides a framework for HR activities that assist the organization in creating a high performing workforce that is motivated and happy.

The SHRM concept is a powerful concept if applied correctly within an organization. HR groups are able to plan for future growth and respond to any changes that may occur. In addition, SHRM allows companies to fully utilize their human assets to create real advantage over their competitors. This advantage comes from having the HR policies and strategies perfectly aligned with the corporate goals so that the organization has the right human capital, right benefits packages and training methodologies to allow the employees to effectively do their jobs.

In short, SHRM allows an organization to create a competitive advantage with their human assets by aligning their strategic goals with their HRM systems. Author Ronald Sims states it clearly when he writes:

Successful organizations in the future must closely align their HRM strategies and programs with the external opportunities, competitive strategies, and their unique characteristics and core competence. Organizations that fail to clearly define HRM strategy or competitive strategy that explicitly incorporates human resources will not be successful (Sims, 2002, p. 30).

References:

  • Sims, R. R. (2002). Organizational success through effective human resources management (1st ed.). Westport, CT: Quorum Books.
  • Truss, C., & Gratton, L. (1994, September 1994). Strategic human resource management: A conceptual approach. The International Journal of Human Resource Management, 5(3), p. 663.
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